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TMI Blog2019 (12) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... viding exempted services except in circumstances of maintenance of separate accounts for receipt, consumption and inventory and taking credit only to the extent that is attributable to providing of taxable service; as an exception to these two, necessarily to be read in unison, the discharge of tax liability by restricting the debit of CENVAT credit to the percentage stipulated supra is acceptable in law. Such restriction is not, in any way, connected to the entitlement, or availability, of credit but is intended to ensure that, at any point in time, the discharge of tax liability by payment to the exchequer shall not be less than 80% of the dues. The computation of tax liability in the show cause notice has proceeded on the assumptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994. 2. The issue in the dispute, pertaining to availment of CENVAT credit of the tax paid in value of services procured and used by M/s Reliance General Insurance Co. Ltd, a provider of general insurance service and insurance auxiliary service , and including admittedly exempted service, for rendering taxable and exempted services, is the alleged failure to restrict the utilisation of such credit, even though separate record of consumption of input service, required under rule 6(2), were not maintained, to the rate prescribed in rule 6(3) of CENVAT Credit Rules, 2004. In consequence, the credit, in excess of eligible balance in November 2006, February 2007 and March 2007, utilised for discharge of tax liability was sough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating authority had failed to decide on the validity of discharge of tax liability by debit of CENVAT credit that was not available to them and that the harmonious reading of the provisions pertaining to assessment and payment of tax with the restriction on utilisation of CENVAT credit would require monthly computation and not the biannual balance as held in the impugned order. Placing reliance on the disfavouring by Hon ble Supreme Court, in Union of India v. Indswift Laboratories Ltd [2011 (265) ELT 3 (SC)], of reading down of statutory provision, the competence of the adjudicating authority to brush aside non-payment of tax has been challenged. 5. Learned Counsel for the respondent draws attention to the unambiguous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded in the value made over to the provider of service. Again, there can be no doubt that rule 6(1) of CENVAT Credit Rules, 2004 precludes the availment of credit attributable to input services used for providing exempted services except in circumstances of maintenance of separate accounts for receipt, consumption and inventory and taking credit only to the extent that is attributable to providing of taxable service; as an exception to these two, necessarily to be read in unison, the discharge of tax liability by restricting the debit of CENVAT credit to the percentage stipulated supra is acceptable in law. Such restriction is not, in any way, connected to the entitlement, or availability, of credit but is intended to ensure that, at any po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have pleaded that if the 20% ceiling on utilization is applied only to credit of services other than the services covered by Rule 6(5) and credit of inputs goods other than capital goods, utilization of credit for payment of service tax, in excess of the ceiling has taken place only in January 2005, March 2005 and May 2005 and this excess utilized credit cannot be demanded as Rule 6(3)(c) is silent with regard to the period during which the 20% credit shall be utilized and in this regard reliance has been placed on Tribunal s judgment in case of Vijayanand Roadlines Ltd. v. CCE, Belgaum reported in 2007 (7) STR 219 (Tri.-Bang.), wherein the Tribunal with reference to Rule 3(5) of the Service Tax Credit Rules, 2002, which is pari materia wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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